Can You Cancel Car Insurance at Any Time?
Technically, you can cancel your car insurance policy whenever you wish—but it may not always be the best idea.
Written by Sarah Gray
Reviewed by Jessa Claeys
Technically, you can cancel your car insurance policy at any time. However, once you take into consideration your provider's cancellation policies and potential fees, you may want to consider other options before processing a cancellation.
If you’ve ever wondered whether it’s possible to cancel your
car insurance
coverage at any time, the simple answer is yes. There are lots of reasons policyholders cancel car insurance, even when they’re happy with their coverage. But before you decide to make the move, it’s important to consider all the possible consequences.Whatever your reasons for considering canceling your current coverage, we’ve created this guide to answer all your questions. We’ll start by letting you know when you can cancel an insurance policy, then we’ll walk you through all the things you should consider first before giving you the steps you’ll need to process your cancellation.
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4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ driversCan you cancel a car insurance policy at any time?
Technically, yes. However, before you pick up the phone or pull up your mobile app, you need to take into consideration your current insurer’s cancellation policy to see how early cancellation might affect you financially.
What to consider before canceling your car insurance
Though you may be able to cancel your auto insurance policy anytime, here are some things you should consider before doing so:
Cancellation fees
Some car insurance companies charge a fee for early cancellation. Often, this fee is around $50, but other times it is calculated as a percentage of the final premium you would have owed on the rest of the policy.
Most insurance providers, though, either do not charge cancellation fees or offer various ways to avoid them. Before beginning the cancellation process, you should check with your provider to see if you’ll incur any fees for early cancellation—especially if you’ve already paid your policy in full.
Cancellation letter
Many providers require you to present your cancellation request in writing. While a simple email will often fit the bill, some insurers will require a formal letter, signed and dated by you.
Again, be sure to contact your current provider to find out if they require such a letter. If they do, ask what to include in it and where to send it.
Notice period
Finally, some auto insurance companies require a 30-day notice in advance of your policy cancellation. While less of an inconvenience than cancellation fees and letter-writing, this is still something to keep in mind.
Key Takeaway Even if it’s not required, it’s a good idea to contact an insurance agent before canceling your policy to ensure you know all the steps involved. You may even wind up with a lower rate!
How to cancel a policy with your insurance company
After thinking through all of these factors, if you decide canceling your current policy is the way to go, you’ll need to follow these steps.
1. Set up your new policy
If you’ve never seen
how a car insurance lapse can impact rates
, trust us—you don’t want to find out. That’s just one of the reasons why it’s important to make sure you have a new policy set up and ready to go before the old one ends. An even more important reason is that most states have
minimum car insurance requirements
that must be met at all times for all registered vehicles. Failure to maintain these minimums can lead to fines—or even having your vehicle registration
revoked. 2. Contact your current provider
Some insurance companies allow customers to cancel a policy online, via email, or even through a mobile app, but many require an actual phone call. While this may sound like a hassle, it could wind up benefiting you. Insurers want to keep your business, so they may offer you discounts or better rates to convince you to stay.
If you are able to cancel your old policy without contacting an insurance agent or a customer service line, it’s not a bad idea to go ahead and make that phone call anyway to ensure you have all the details about how to cancel your coverage. An agent can walk you through the process in a way that AI typically can’t.
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3. Fill out the paperwork
Odds are, you’ll have at least one cancellation form to sign to cancel your policy. This is often already filled out and includes information about the date your coverage will end, as well as a statement that you are, in fact, canceling your coverage. Be sure to look over anything you’re asked to sign carefully to ensure all the information is correct.
4. Send proof of new insurance
As we already noted, your current provider may require
proof of insurance
for your new coverage to process your cancellation. A picture or screenshot of your new insurance identification card is often enough proof.You will also need to send proof of your new insurance coverage to your lender if you’re
leasing a car
or you’re still paying off a car loan
for the vehicle you’ve just canceled coverage on.5. Receive a notice of cancellation and a refund
Your current provider will send you a written notice once your policy has been officially canceled. This may come in the form of a hard copy letter or an email, and it will often contain information regarding any refunds of unused premiums you’re entitled to.
Do you get a refund after canceling your car insurance policy?
If you’ve paid any of your old insurance premium in advance, you should be entitled to at least some money back. However, every provider is unique when it comes to this part of the cancellation process. Whether you get a refund and how much of a refund you get will depend on your policy terms.
If you’ve paid a large part of your policy up front—say, six months or more—you’re very likely to receive a refund, though it may be subject to short-rate premium calculations.
You may also be entitled to a refund if you cancel in the middle of the month. Since premiums are paid ahead, typically either on a monthly, bi-annual, or annual basis, if you cancel your policy on the 15th, you could receive a refund for the premium that would cover you for the remainder of the month.
If you cancel your existing policy during your payment grace period, you may not get a refund. Again, this depends on the details of your insurance agreement, so be sure you read those details carefully, and ask your agent any questions before you begin processing your insurance cancellation.
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FAQs
What happens if you stop paying your insurance premium?
If you stop paying your premiums without notifying your provider of an intention to cancel, they will continue to bill you for coverage. Once your payment grace period has expired, they will cancel your plan.
While it may sound like you’ve just accomplished your goal without doing any work, think again. Your non-payment will likely show up on your credit history as a derogatory mark, which can affect your credit score. Plus, it will also result in your being categorized as a high-risk driver, and that means you’ll be subject to much higher car insurance rates.
How soon can you cancel a car insurance policy?
Technically, you’re able to cancel an auto insurance policy at any time after beginning coverage. That said, the details of your individual policy will dictate how quickly that cancellation can go into effect.
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